Addressing Affordable Housing: Funding Matters

by Marion Major | Sep 30, 2024

Co-signed: Elizabeth Bridgewater, Executive Director, Windham & Windsor Housing Trust
Chris Campany, Executive Director, Windham Regional Commission

Housing remains at the top of the media cycle for good reason: there are still not enough homes for people. Recently, Vermont’s Department of Housing and Community Development and the Natural Resources Board released the Act 250 Interim Exemption Map. The map is a helpful visual representation of the update to Vermont’s landmark development law, designed to ease regulatory restrictions and lower barriers for developers to build more housing in designated areas. It encourages smart growth development and walkable communities while still conserving rural lands and forests – an important strategy for flood mitigation among a great list of benefits.

While this is an exciting step forward, on its own, regulatory reform will not jumpstart development and solve our housing crisis. The Act 250 permitting process can be redundant and costly, and greater predictability of outcomes across all permitting processes would save time, which would save money. But there are many other factors that serve as real barriers or cause delays, drive up costs and ultimately result in unaffordable rents and home prices.

The biggest barrier to creating homes is funding. The disconnect between the income a person makes versus the price of rental construction or price of homeownership is huge. Cutting the cost of permitting in the equation is minimal in the overall figure. This means that the rents charged to make a building operating budget ‘work’ will always be higher than what local families earning an average wage can afford. Funding matters.

Another barrier which poses real constraints on where development can physically happen around the region is the water and waste water systems. The newly released map shows opportunity in many of our small village centers around the region. A forthcoming map of where wastewater systems and service areas exist is in the process of being developed through the UVM Leahy Institute for Rural Partnerships. This will provide a more detailed picture at both the state and local levels as to where and if housing can be built in the quantity needed and at a scale that reduces costs for developers, owners and renters. These towns all feel the pressure of a lack of housing affordability; however, if that public infrastructure does not exist, which is the reality for most of our towns, any type of development – housing or economic – is severely limited. These infrastructure projects are costly; too costly to add on to a housing development budget or for towns to shoulder. Here, too, funding matters. 

Low wages, rising construction costs, a lack of public infrastructure, aging housing stock and a lack of investment have all contributed to this crisis over time, and since the pandemic it has grown even tighter, driven by pandemic migration and a proliferation of short-term rentals.

We are encouraged to see so much positive intention and discussion around housing, and we are delighted that regulatory reform has been a strong focus for state officials and lawmakers. However, without sufficient funding, this effort will not gain the traction that is desperately needed. No matter how efficient the process is made, if there is no funding, there is still less housing.

We work on this issue every day; the Housing Trust by identifying ways to create and support permanently affordable homes, from rentals to homeownership opportunities, and the Windham Regional Commission working with towns and the state on public infrastructure. We are not alone. In Southern Vermont we have experts working alongside us from all angles: Brattleboro Housing Partnership, embarking on new construction; the Winston Prouty Center, working to create new homes on their property; M&S Development creating new homes for refugee families, and many individual private property owners stepping in and creating affordable housing through Vermont Housing Improvement Program.

All these approaches are highly impactful, and all are necessary. What’s missing from the equation is adequate funding to address all of these overlapping needs.

Vermont’s housing crisis has been a long time in the making, now it’s time to support concrete solutions. The Act 250 Exemption Map is a great visual tool and a good step in the right direction. Let’s keep the momentum going.

We encourage our lawmakers to continue to invest in proven programs that work, while exploring new ideas and ways of doing things. By making financial investments in the programs that work now, and by working to expand the reach and impact of these programs, perhaps we can begin to envision a more affordable Vermont, for all Vermonters.

This opinion piece was written by Marion Major and Co-signed by Elizabeth Bridgewater, and Chris Campany, originally published by Windham & Windsor Housing Trust and can be found here: ADDRESSING AFFORDABLE HOUSING: FUNDING MATTERS - Windham & Windsor Housing Trust (homemattershere.org)